China’s Credit Slumps as Funds Used to Prop Up Stock Market
This article is for subscribers only.
China’s efforts to halt a stock market rout spurred a surge in new lending to financial institutions last month, while credit to the real economy weakened.
Aggregate financing slumped to 718.8 billion yuan ($116 billion) in July, from 1.86 trillion originally reported for June, according to the People’s Bank of China, missing the estimate for 1 trillion yuan in a survey of economists. New yuan loans jumped to 1.48 trillion yuan, almost double economists’ estimate, with 891 billion yuan going to financial institutions as the central bank backed stock rescue efforts.